Tuesday, October 02, 2007

Forgive me. I slept until nearly 8:00 am today, and then my PC got abducted by aliens. I am a drive-by victim of this "anti-virus software" scam foisted on me by software developers who will not allow me to take enough risk. You know.

David Brannan, 44, of Monroe, N.C., is co-founder of a software company that's been in business since 1989. He and his wife have owned their home for 18 years and are in the process of buying a new, custom-built home. Brannan has an excellent credit score.So he was stunned last week when CitiMortgage (C), which just a week earlier had said everything was in good shape, sent a letter saying his mortgage application had been rejected. It suggested he consider credit counseling.

Brannan called Citi, which told him his income for the past two years wasn't enough for the size of the loan. He says Citi refused to include profit distributions from his company that account for more than half his income. (CitiMortgage declined to discuss Brannan's application. But spokesman Mark Rodgers says the company will restructure or decline a preapproved loan if it can't sufficiently verify information from a borrower.)

Brannan belongs to a group that's become a kind of drive-by victim of the mortgage industry crisis: the millions of Americans who are self-employed.

Yes, those people who custom-build homes and don't have permanent financing lined up yet. We see a lot of that.

This part is nice, though:

McNamee says lenders that are still catering to the self-employed have been flooded with business, which means it might take longer to process a loan. That can be difficult for some successful self-employed borrowers to accept. "When you're talking about CEOs of companies, they want an answer, and they want it now," McNamee says.

But hurrying the process, he says, could increase the cost of the loan. Even for well-off business owners, qualifying for a mortgage is "not that smooth, easy no-brainer like it used to be. If you want it to be quick, you're paying a higher price."

Anyway, feel free to discuss pending home sales until we hear what happened to CR this morning.